FTC hires economist in Google case

The FTC has hired a prominent outside economist to assist with its antitrust investigation of Google in a sign it is prepping for a potential court fight with the company.

Rich Gilbert, an economics professor at the University of California, Berkeley, has been tapped by the FTC to serve as a key economist in the commission’s probe of whether Google’s business practices are anti-competitive, POLITICO has learned from three sources.

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Gilbert joins Beth Wilkinson, the former Justice Department prosecutor who played a lead role in the conviction of Oklahoma City bomber Timothy McVeigh, as outside experts hired to help the FTC in the event it brings a case against Google.

The hiring of an outside economist in an antitrust case as large and complex as the Google probe is common, experts say. But it’s also a clear sign that the FTC has escalated its antitrust investigation and is preparing in case it brings litigation against Google.

“It’s a precaution they would be taking in the case of litigation. You would hire an external economist to serve as your expert,” former FTC Chairman Bill Kovacic said after being informed by POLITICO of the hire. “If you want to show credibility or commitment to the matter, you do the things to indicate to the other side you are ready to proceed.”

The FTC declined to comment. Commission Chairman Jon Leibowitz, however, said recently he expects the FTC to make a decision on the Google case by the end of the year.

As an economist in the investigation, Gilbert will be tasked with writing reports that show whether there has been harm to innovation in the search market, and he will serve as an expert witness if the FTC pursues litigation against Google, sources said.

Gilbert, 67, is a former Clinton-era deputy assistant attorney general for economics in DOJ’s Antitrust Division, the highest-ranking economics position in the Antitrust Division. He specializes in antitrust economics, intellectual property and research and development, according to an FTC bio sheet.

Gilbert has consulted for DOJ on cases involving EchoStar’s failed attempt to merge with DirecTV and a Justice Department case against Microsoft in the mid-1990s. He also oversaw the drafting of guidelines for DOJ and FTC antitrust enforcement policy for “licensing of intellectual property protected by patent, copyright, and trade secret law, and of know-how,” according to testimony he gave the FCC in 2004.

Gilbert did not respond to requests for comment.

“I would expect the FTC to hire someone like Rich Gilbert for this investigation,” Allen Grunes, an attorney for Brownstein Hyatt Farber Schreck in D.C. and a former DOJ antitrust official said after POLITICO informed him of the hiring. “He’s one of a group of go-to economists for the biggest cases, said

But Grunes added: “Rich certainly has the credentials in this business, and he’s super smart but Google will have already hired the anti-Rich Gilbert or probably three of the anti-Rich Gilberts on its side.”

Google declined to comment.

Elizabeth Wasserman contributed to this report.

This article first appeared on POLITICO Pro at 5:06 p.m. on October 2, 2012.